Lockup Agreement

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Lockup Agreement

Where the purchaser of securities agrees not to sell the securities for a certain period of time (the lockup time).

Lockup Agreement

1. See: Crown jewel lockup agreement.

2. During an IPO, a contract prohibiting executives, underwriters, and/or venture capitalists from selling their shares in the company for a certain period of time. The period of time is usually about six months, but may be longer or shorter. A lockup agreement exists to reduce the pressure for volatility as the company goes through its first few months of public trade.

lockup agreement

A contractual offer of valuable assets or stock made by a takeover target to the suitor deemed most acceptable to management. A lockup agreement tends to discourage unwanted suitors, but it may penalize the target firm's stockholders because it eliminates counteroffers. Also called crown jewel lockup agreement.
References in periodicals archive ?
Also, Sphere 3D and Imation have entered into a lock-up agreement, dated 10 August 2015, which imposes limitations on the transfer and sale of the common shares issued to Imation at closing and requires that Imation vote its shares in accordance with any recommendation of Sphere 3D's board of directors for a designated period of time.
A lock-up agreement in the share acquisition context refers to a contract between a prospective takeover bidder and shareholders of the target corporation, pursuant to which the bidder undertakes to launch a takeover bid at a price no lower than an amount specified in the contract.
Further, Cliffs has a lock-up agreement with Spider's largest shareholder, MineralFields Group, under which it has agreed to tender its Spider shares, which represent 10.